As the coronavirus send ripples across the global economy, the regional gambling sector faces unique challenges.
The coronavirus has shaken the world. The novel COVID-19 virus quickly spread across continents and has undermined the stability of much of the global economy. That will translate into tough times for businesses in every sector.
Companies are shutting down production lines due to a lack of raw materials or to limit the spread of the virus. Workers now fear for their financial welfare, in addition to their physical wellbeing
Unsurprisingly, the global gambling sector is not immune to the economic fallout. The gambling industry has grown rapidly in recent years but the coronavirus could pose a major setback.
The expectation for the next five years was that the gambling sector would increase by 5% annually, reaching revenues of more than US$230 billion worldwide. If the situation escalates, the industry will fail to realise these expectations.
Macau’s gross gambling revenue totalled at US$36.5 billion last year, a 3.4% drop from the year before. As casinos remain shuttered, these losses will continue to mount.
The gambling sector is projecting heavy financial losses
Most countries are trying to control the spread of the virus by limiting the mobility of their population. Some countries have implemented temporary restrictions on large public gatherings. Sports matches, cinemas, theatres, and public spaces have been closed.
As more people become cautious about public spaces, the physical gambling sector will suffer heavy financial losses. Macau is one of the gambling capitals of the world. Casinos have already introduced their own measures to limit the spread of the coronavirus. China’s government asked most casinos to shut down for two weeks. Gambling revenue fell by 88% in Macau.
The Asian tourism sector has been decimated by the outbreak. Flights to some countries are limited, which means significantly fewer tourists and more lost revenue for gambling companies.
Online gambling, however, could be one of the few industries that stand to gain from the uncertainty surrounding coronavirus. Asia is one of the world’s emerging online gambling markets, accounting for around 12% of the global market. Europe accounts for 22.4%. In the last few months, there has been an uptick in online gambling activity across all platforms.
Residents that are forced to stay home and quarantine may be drawn to online football betting services like BetAmerica.com. Many of the world’s biggest online casinos are reporting a surge in account registration, betting activities, and deposits on their platforms.
Expectedly, there has been a high volume of purchase licenses for online gambling platforms. There will likely be a further increase of 11.5% between 2019 and 2025. Big companies are seeing the coronavirus situation as a way to promote their online services and possibly increase their revenue Their hope is that many new customers will continue to gamble online even when the coronavirus situation has abated.
Even though some of the most influential gambling companies are experiencing the biggest revenue dip of all time, it is not something to be concerned about in the long run. In fact, it might even be beneficial for gambling businesses since they can promote their online services and attract more people in the future.
Correction: A previous version of this article suggested that Singapore’s Marina Bay Sands had suspended operations. The casino is continuing operations with precautions in place to prevent the spread of Covid-19.